The Conference Board of Canada’s Director of Economics Matthew Stewart offers the following insights on today’s Labour Force Survey (LFS):
“Canada’s labour market took another pause in June. This is the second consecutive month with no job gains. Nonetheless, the labour market’s performance so far this year remains impressive and unemployment remains very low. The best news from todays release is on the wage front where tight labour markets have resulted in very impressive 3.8 per cent year-over-year increase in hourly wages.”
- The economy lost 2,200 jobs in June. This is the second consecutive month where the economy generated no new jobs.
- Even with the pullback in employment, Canada’s labour market performance in the first half of the year remains impressive.
- The economy has added 247,500 new jobs since December most of which have been full time positions.
- Over the last year the economy has added 421,000 jobs—an increase of 2.3 per cent. The last time the economy added more than 400,000 jobs in a one-year period was in 2003.
- Although employment growth stalled in the month, the labour force increased by 30,500 which resulted in the unemployment rate rising to 5.5 per cent, up 0.1 percentage points from last month.
- Despite the increase in the unemployment rate, labour markets remain very tight. This is evident by the large pickup in hourly wages. Average hourly wages rose by a solid 3.8 per cent in June compared to one year earlier. With overall inflation only running at 2.4 per cent, average real wages are running at an impressive 1.4 per cent.
- While the overall employment gains were flat, full time jobs rose by another 24,100, offset by a decline in part time positions.
- By industry, health care and social assistance continued to be responsible for much of the job gains. The industry gained 21,900 new jobs in the month and is up 108,200 over the last year.
- Meanwhile, goods producing industries shed positions with declines in manufacturing, construction, and natural resources.
- It was not surprising that employment took a pause in June. Economic growth has been weak to start the year, while job gains have remained exceptionally strong. The best news came from the wage front. Very tight labour markets are clearly having an impact on wages which posted a solid real increase. This increase should allow households to continue increase spending despite their very high levels of household debt and ongoing uncertainty.